Natural Gas Boom Attracts Detroit Automakers
Detroit automotive manufacturers GM and Chrysler announce plans to produce natural-gas powered pickups.

As gasoline prices continue to climb, automotive manufacturers GM and Chrysler are transitioning to natural gas-fueled heavy duty pickups.

Among the top U.S. compressed natural gas (CNG) companies, Clean Energy Fuels (NYSE: CLNE) supplies its customers with CNG equal to a gallon of gasoline for $2.59, while the current national average of gasoline is $3.79 a gallon. Americans haven't seen gas prices even close to $2.59 since late 2009.

Honda is currently the only manufacturer of a CNG fueled car, selling roughly 2,000 of its Civic GX natural gas models last year in a limited number of states. Honda is expanding this year to offer the Civic GX in 50 states, expecting to double sales nationwide.

But with soaring gas prices and heightened interest in clean-burning, domestically produced natural gas, Detroit automakers join Honda in recognizing the potential gains in manufacturing CNG fueled vehicles.

At the 2012 Work Truck Show in Indianapolis, General Motors disclosed its plan to produce its Chevy Silverado and GMC Sierra bi-fuel pickups later this year.

Chrysler followed suit with the launch of its Ram 2500 heavy duty pickup that can run on both CNG and regular gasoline. The bi-fuel Ram 2500 costs roughly $12,000 more than a gasoline-powered pickup, Chrysler assures buyers that the initial higher payout costs of a natural gas powered pickup will create “significant cost savings over the life of the truck”. 

While GM and Chrysler's success in expediting the shift toward making natural gas fueled vehicles a mainstream reality is a significant step in the right direction, further progress is crippled by environmental concerns about natural gas extraction methods and limited access to refueling stations.

Major automotive manufacturers working to advance the CNG powered auto industry are prepared to tackle the potential risks and drawbacks to reap financial and, more importantly, the long-term gains of making the switch to clean-burning, domestically sourced fuel.

Until next time,

Stephanie



Natural Gas Boom Attracts Detroit Automakers originally appeared in Energy and Capital. Energy and Capital, a free 3x-per-week newsletter, offers practical investment analysis in the new energy economy.
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